BackAAP alleges Veerappa Moily favouring Essar Group
AAP claims oil minister is pushing the case of two oilfields awarded in 1996 for which contract is yet to be signed
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New Delhi: A day before his constituency Chikkaballapur votes, petroleum minister M. Veerappa Moily was targeted by the activist Aam Aadmi Party (AAP) that is fighting the ongoing general election on a clean governance ticket, and which claimed that the minister was pushing the case of the Ruias-led Essar Group, regarding the Ratna and R-series oilfields awarded to it in 1996 and for which the contract is yet to be signed.
AAP said in a statement that “the issue at hand is whether the field can be given to Essar even though the bid conditions are 18 years old and the price of oil has increased 6 times in this period, given the fact that the contract was never signed".
This is one of the options in a note prepared by the petroleum ministry for the consideration of the cabinet committee on economic affairs (CCEA), according to AAP. The options are: cancelling the award and rebidding the fields; returning the fields to state-owned Oil and Natural Gas Corp. Ltd; signing the production-sharing contract at old rates of cess and royalty and cost recovery limit; and revise the agreement and sign it at the new rates.
Moily declined to comment.
The ministry needs the permission of the Election Commission before it can send the note to CCEA, said a government official who spoke on condition of anonymity. The commission’s model code of conduct that restricts the ability of the government of the day to make policy decisions during elections is currently in force. The note is yet to be sent to the Election Commission.
“Essar was awarded the Ratna (and) R-series block in an open and transparent manner through a bidding process. We are not aware of any internal notes or documents of the petroleum ministry in the matter. However, it is in the national interest to make any block operational especially when there has been significant delay already and the country is importing over 70% of its crude requirement at a high cost in foreign exchange," said a spokesperson for Essar.
London-based Premier Oil Plc was jointly awarded the blocks with Essar.
The Ratna and R-series fields are around 130km off the coast of Mumbai and are valued at $9.2 billion according to the AAP statement.
The Congress-led United Progressive Alliance has been besieged by controversies regarding irregularities in the allotment of natural resources such as spectrum and coal, and the pricing of gas. While a message left for a Premier Oil spokesperson remained unanswered, its public relations agency in London declined comment.
The AAP’s Arvind Kejriwal, in his short stint as Delhi’s chief minister, ordered the filing of a complaint against Moily, Reliance Industries Ltd (RIL) chairman Mukesh Ambani and others for allegedly conspiring to double gas prices. Both Moily and RIL have rejected Kejriwal’s allegations.
The government deferred the gas price-increase due to take effect on 1 April, acting on a directive from the Election Commission.
Investor interest in the Indian hydrocarbon sector has been waning, with around 70% of Indian basins remaining largely under-explored. Even response to the New Exploration Licensing Policy has been tepid. Investors have given the thumbs-down to the Indian hydrocarbons sector, and BHP Billiton Plc, the world’s largest miner, had exited its blocks in India.
“This government is going (out of power) and its intent is to grab as much as it can. We are going to write to the Election Commission regarding this," Prashant Bhushan, a senior AAP leader and national executive member, said at a press conference in Delhi.
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